One lesson I have learned in early-stage investing is to eliminate knockout risk. KO risk is when there is one single point of failure for the company that could quickly bring it to zero. Most people would argue that all early-stage companies have knockout risks. I beg to differ. I believe there are ways for a founder to manage knockout risk to give them more options to operate.
Cash Burn Sensitivity.
Building Heavier Products so they Cannot Be Easily Copied by Larger Platforms.
Being Aware and Open to Your Own Founder Biases on Products and Markets.
Protecting any Data Supply Chain Issues.
This, of course, is all easier said than done. Successful companies have been built by ignoring these factors; however, these are not the companies I am interested in.
